Owner of tax and healthcare companies pleads guilty to fraud

Published: Friday, April 11, 2014 at 06:03 PM.

The owner of a tax preparation company with a location in Burlington has pleaded guilty to tax fraud, healthcare fraud and money laundering, according to a release from the U.S. Department of Justice.

Claude Arthur Verbal II, formerly of Raleigh and now of Miami, also ran a healthcare company in Burlington and used that business to file more than $1 million in fraudulent Medicaid claims.

He used all the money he stole and laundered to buy luxury cars, homes and jewelry.

Verbal pleaded guilty Thursday in two separate cases in federal court, Assistant U.S. Attorney General Kathryn Keneally and U.S. Attorney Ripley Rand for the Middle District of North Carolina announced Friday.

Court documents say Verbal was the owner of Nothing But Taxes, a tax return preparation franchise with 10 branches throughout North Carolina that operated from 2005 to at least 2012. Its Burlington location was at 1106 Vaughn Road.

At least three employees of the Burlington Nothing But Taxes office — branch manager Leslie Louise Brewster and tax return preparers Tiffany Ladeva Rogers and Dawn Kirby Williams — have pleaded guilty to wire fraud, identity theft and aiding in tax fraud. They were sentenced to between three and six years in federal prison.

The owner of a tax preparation company with a location in Burlington has pleaded guilty to tax fraud, healthcare fraud and money laundering, according to a release from the U.S. Department of Justice.

Claude Arthur Verbal II, formerly of Raleigh and now of Miami, also ran a healthcare company in Burlington and used that business to file more than $1 million in fraudulent Medicaid claims.

He used all the money he stole and laundered to buy luxury cars, homes and jewelry.

Verbal pleaded guilty Thursday in two separate cases in federal court, Assistant U.S. Attorney General Kathryn Keneally and U.S. Attorney Ripley Rand for the Middle District of North Carolina announced Friday.

Court documents say Verbal was the owner of Nothing But Taxes, a tax return preparation franchise with 10 branches throughout North Carolina that operated from 2005 to at least 2012. Its Burlington location was at 1106 Vaughn Road.

At least three employees of the Burlington Nothing But Taxes office — branch manager Leslie Louise Brewster and tax return preparers Tiffany Ladeva Rogers and Dawn Kirby Williams — have pleaded guilty to wire fraud, identity theft and aiding in tax fraud. They were sentenced to between three and six years in federal prison.

In a related case, Rakecia Brame, a former social worker with the Alamance County Department Social Services, pleaded guilty earlier this year to wire fraud, aggravated identity theft, and aiding and assisting the preparation of false tax returns. Brame admitted to selling the identities of DSS clients to tax preparers for use as false dependents on tax returns.

“The tax fraud committed by Claude Verbal and the other Nothing But Taxes defendants is an affront to honest, hardworking taxpayers,” Keneally said. “The Justice Department will prosecute and seek just punishment against those who prepare fraudulent tax returns.”

Verbal admitted to one count of conspiracy to defraud the United States, one count of aiding and assisting the preparation of false tax returns, one count of healthcare fraud, and one count of money laundering. The plea was accepted Thursday by U.S. District Judge Catherine Eagles in Greensboro. Sentencing is set for Aug. 11. Verbal faces as much as 28 years in federal prison and $850,000 in fines.

He has agreed to pay restitution to the Internal Revenue Service and Medicaid.

Verbal personally prepared false tax returns for clients and taught and encouraged employees to do so. The company frequently offered clients dramatically larger tax refunds if they agreed to make additional cash payments to tax preparers.

Verbal and many of his employees also facilitated the purchase and sale of false dependents at NBT by purchasing names, dates of birth and Social Security numbers of individuals from the community for use as false dependents on other NBT clients’ tax returns.

Eight former Nothing But Taxes employees have pleaded guilty to charges involving federal tax fraud, fraud and identity theft crimes in the Middle District of North Carolina.

Verbal also owned and operated Infinite Wellness Concepts, a Medicaid behavioral health provider with locations in Burlington, Durham and Greensboro.

That company provided group therapy, intensive in-home services, enhanced mental health and substance-abuse services. Court documents show Verbal acquired at least $1 million in fraudulently obtained funds from Medicaid. Verbal billed at higher rates, inflated the number of his clients, billed for services not rendered and created false documents to support the fraudulent claims.

According to court documents, Verbal used the proceeds of the tax and healthcare fraud schemes to make extensive purchases of luxury cars, homes and jewelry. The money laundering charge to which Verbal pleaded guilty was for buying a $52,000 diamond ring with proceeds from the healthcare fraud.

Law enforcement authorities seized $765,917 from bank accounts controlled by Verbal, a 2011 Toyota Camry, and four pieces of diamond jewelry, including a 7-carat diamond ring. The United States initiated a civil forfeiture action alleging the properties constituted proceeds traceable to the health care fraud, and on Sept. 19, Eagles entered an order forfeiting the property to the government.